4/16/2009 @ 5:25PM

The Biggest Sports Site You've Never Heard Of

When Chris Russo began his gig as head of new media for the NFL in 1999, he noticed the league had done little to capture the fantasy football craze on its Web site.

With Commissioner Paul Tagliabue’s blessing, he built NFL.com’s fantasy business into a cadre of 2 million users by 2005, his last year with the league. His secret: Utilizing a handful of small, independent football sites catering to hardcore fans. Sharing stats and other content with micro sites drove the first waves of fans to the league’s Web site to play fantasy football, and the push was on.

“It made me realize there was a world of niche sites out there,” says Russo, who proceeded to jump on that knowledge in building his new business, Fantasy Sports Ventures, kicked off in 2006. Through a buying binge of 30 sports Web sites, along with promotional and revenue sharing agreements with some 400 affiliates, Russo has built FSV into the fifth-most popular sports Web business, with more than 10 million unique viewers a month, according to Nielsen Media Research.

That’s more than AOL Sports and MLB.com. A year ago, the company forged a deal with USA Today that gave the paper a minority stake along with its sports content on FSV sites. Annual revenue exceeds $10 million (Russo won’t get more specific than that), with Russo predicting the company to turn its first operating profit this year.

An estimated 25 million Americans play fantasy sports, with the average player spending more than $150 per year on fantasy games and related products. That adds up to a $3.8 billion industry, which, Russo figures, doesn’t all have to be ceded to the likes of
Yahoo
,
CBS
and ESPN.

The FSV stable includes footballguys.com, an all-encompassing site for football fans and fantasy geeks, whose numbers figure to perk up in front of the April 25 NFL draft. The company also owns baseball-reference.com, the go-to spot for current and historical data sought out by baseball nuts.

His big bet: Convincing advertisers they’ll get bang for their buck by keeping users engaged with games and other interactive fun, which sports freaks tend to eat up. That way, there’s no need to charge subscription fees, something he does on just two FSV sites–Baseballhq.com, a fantasy baseball site, and thehuddle.com, popular with fantasy football players.

“Fans are used to free content on these sites, and it’s hard to start a subscription in this environment,” Russo says.

Critics have their doubts. Lacking a brand name like Fox Sports or ESPN leaves FSV without valuable promotion. With the rocky economy already making it tough to further grow a sponsorship list, the dual revenue derived from advertisers and subscribers becomes that much more important, says Lee Berke, a sports business consultant who specializes in new media.

“A passionate fan should be willing to pay a reasonable price for access to these sites,” he says.

Russo isn’t convinced. He believes that the relative anonymity of his company can be used as an asset to make the business more about the sponsor’s brand than his. That’s not going to happen with ESPN. For example, he’s partnered with Gillette to create an online car racing game for Nascar aficionados.

What Gillette likes is that the game actually lives on its own Web site, with FSV’s sites handling the promotion. So far, Russo’s strategy of pushing people right onto sponsors’ sites in exchange for cash seems to be working, given that traffic and revenue have roughly doubled over the past year.